Hull Inc. is considering the acquisition of equipment that costs $200,000 and has a useful life of 6 years with no salvage value. The incremental net cash flows that would be generated by the equipment are:
Incremental net cash flows
Year1.......................$77,000
Year2.......................67,000
Year3.......................51,000
Year4.......................64,000
Year5.......................50,000
Year6.......................68,000
The payback period of this investment is closest to:
A) 2.8 years
B) 2.6 years
C) 3.1 years
D) 5.0 years